Grand Theft Auto IV Sells Six Million Units in First Week

"Grand Theft Auto 4," the latest version of the hit video game franchise, racked up first-week sales of $500 million, Take-Two Interactive, the game's publisher, said Wednesday. The report exceeded the sales expectations of analysts.

The company is expected to report that it sold 6 million copies of the game, 3.6 million of them on the first day. The sales exceed projections of industry analysts who were estimating that about 5 million consumers would purchase the game in the first two weeks.

The significance of the sales extends beyond buoying Take-Two, a company that has had its share of legal, financial and management struggles in the last few years.

The company is the subject of a $2 billion hostile takeover effort by Electronic Arts, which is offering Take Two shareholders $25.74 a share for control of the company. If Take-Two can exceed expectations on sales of "Grand Theft Auto 4," it may drive up the share price and force Electronic Arts to raise its offer.

"They were better than the published expectations," said Todd Mitchell, an analyst with Kaufman Brothers. "I would say they were marginally better than the whisper number."

But, he added, he did not "think that many people buy the idea that just because you blow the numbers out on GTA, EA is going to come out with a higher bid."

Electronic Arts' takeover bid turned hostile after Take-Two's management said it would not negotiate an acquisition agreement with Electronic Arts - or any suitor - until after the release of "Grand Theft Auto 4." Now that the game is out, Take-Two may well have entered discussions with Electronic Arts and possibly with other suitors who covet the "Grand Theft Auto" franchise, but Take-Two has declined to comment on whether such discussions are taking place.

If Take-Two and Electronic Arts wind up seeking a deal, there is pressure on Electronic Arts and also on some Take-Two shareholders to get one done quickly.

Electronic Arts has said that it needs to reach a deal in time to subsume Take-Two's assets before the holiday selling season.

Take-Two's management has said that the success of "Grand Theft Auto 4" is awakening shareholders to the long-term value of the company's stock and that if investors can be patient it can command a higher price in the long term.

The first-week sales figure tops the $400 million benchmark set by Microsoft's "Halo 3" in September.

"This game sets a new standard in the industry," the Take-Two chief executive, Ben Feder, said in a statement.

"Grand Theft Auto 4" has been praised by reviewers for its graphics and for play that allows gamers to depart from the story line. The Parents Television Council, an organization devoted to limiting sex, violence and profanity in media, called the game "brutally violent" last month.

In the game, a former soldier, Niko Bellic, is lured to the United States from Eastern Europe by a cousin who brags of great wealth. On arrival, Bellic discovers that his cousin lied and actually is deep in debt to gangsters. He reluctantly takes on assignments from the mob to save his relative.

"Grand Theft Auto 4" has a "mature" rating in the United States from an industry council that says it is appropriate only for players ages 17 and older because of graphic violence and partial nudity.

Electronic Arts, based in Redwood City, California, began a $26-a-share tender offer March 13, after Take-Two refused to negotiate in February. The offer expires May 16.

Electronic Arts, which makes the "Madden NHL" football games, dropped the bid to $25.74 after Take-Two investors approved an incentive plan that increased the number of shares it would have to buy.

Source ~ International Herald Tribune